Technical Articles – MGT301

Theme # 5: Consumer Buyer Behavior

The most important component of the marketplace is consumer. The buying behavior of end user
is referred to as consumer buying behavior. Consumer market consists of all the end users who
purchase the goods or services for their personal use.

Every day, consumers are making many buying decisions for which marketers are researching on
why, how, when and what are they purchasing. Marketers can learn how, when, what and how
much the consumers are buying by studying actual consumer purchases but it is hard to know
“whys” of consumer buying behavior. The answer to “why” the consumer is buying something
lies deep inside the mind of the consumer. Often, the consumers don’t know themselves why they
are buying certain product. Figure 1 represents a model of consumer buyer behavior which
illustrates that marketing and other environmental stimuli enters the “black box” of consumer
which further produces specific responses. The major job of the marketers is to understand what
is in the black box of consumer.

THE ENVIRONMENT BUYER RESPONSES

Marketing stimuli Others BUYER’S BLACK
BOX Buying attitudes and
Product Economic
Buyer’s characteristics preferences Purchase behavior:
Price Cultural
Buyer’s decision what the buyer buys, when,
Place Technological
process where, and how much Brand
Promotion Social
and company relationship
behavior

Figure 1: Model of consumer buyer behavior

Marketing stimuli involves product, place, promotion, and price. Other environmental stimuli
consist of economic, technological, social, and cultural forces. The aim of marketers is to
comprehend the process of buyer’s black box which changes these stimuli into specific responses.
 Buyer’s black box has two components; buyer’s characteristics which deals with how consumer
perceives and responds and other is buyers decision process which affects buyer behavior.

First, we will see the buyer’s characteristics which influence buyer’s behavior as shown in
figure 2. Consumers’ buying is significantly affected by social, cultural, personal, and
psychological factors. These are the factors which are not in the control of marketers.

Cultural
Culture Social
Reference Personal
Groups Age and
Sub culture Psychological
lifecycle stage
Occupation Motivation
Social class Family Perception
Economic
Learning Buyer
Roles and situation
Lifestyle Beliefs and
status attitudes Sub culture
Personality
and self-
Social class
concept

Figure 2: Buyer’s characteristics Influencing Consumer Behavior

Cultural factors have a huge effect on the buying behavior of consumer. Marketers must recognize
the importance of buyer’s culture, social class, and subculture. The major reason of a buyer’s
wants, and behaviors is his/her culture. In other words, culture shapes the wants of people. Culture
refers to as the set of basic wants, behaviors, perceptions, and values that a member of a society
learns from his/her family or other institutions. Whereas every culture has its own traits and
characteristics.
Following are the characteristics of Pakistani culture:
 Orientation/inclination towards religion.
 Hospitality. The guests, visitor, tourists, whether local or international are always
welcomed by Pakistani people and they are well taken care of.
 Passionate, expressive and emotional
 Aggressive
 Fun loving and colorful; they enjoy and celebrate each moment and event to the core.
Hanging out and family or friends gathering is common in Pakistani culture.
 Hardworking and tough
 Family comes first in Pakistani culture. Pakistani culture is led by collectivism instead of
individualism where family and other relationships are always there for each other’s
support.
 Humble, approachable, helpful and friendly
 Male dominant and conservativeness
 Diversity

Every culture has small cultures within it. These small cultural groups consist of the people who
share same values and perceptions called subcultures. Subcultures are basically cultures within a
culture. They include religions, nationalities, regions and ethnic groups etc. These small cultural
groups (subcultures) can make an essential market segment and marketer soften design the
products based on subcultures. Example of four major subcultures in Pakistan is as following:

Punjabi culture: main characteristics of Punjabi subculture are hospitality and love for food, poetry
and music.
Sindhi culture: main characteristics of Sindhi subculture are love for mystics and Sufism, Sindhi
folk songs and music.
KPK Culture: main characteristics of KPK subculture are hospitality, love, care and respect for
guests, bravery and protection/respect to females.
Balochi culture: main characteristics of Balochi subculture are arts and crafts, tribes, festivals and
storytelling tradition.
Another factor affecting buyer behavior is social class. The Social classes are a society’s divisions
based on the similar interests, behaviors, and values of society’s members.

1. Upper Class: This class consists of the elite who have inherited wealth. They also include
people who have made high income or wealth through exceptional ability. This class can
further be divided into upper uppers and lower uppers.

2. Middle Class: This social class comprised of independent businesspersons, corporate

managers and professionals who have neither unusual wealth nor family status. They
purchase branded products to maintain themselves according to the ongoing trends. This
class can further be divided into upper middles and lower middles.

3. Lower Class: This social class comprised of poor who are working. Their standard of
living is just above the poverty line. It also includes poorly educated unskilled laborers.
This class can further be divided into upper lowers and lower lowers.

These social classes and their further divisions can become a distinct market segment for marketers
as each social class share the same attitude, behavior and spending pattern.
Another major factor which Influences consumer behavior is social factors such as: groups,
family, social roles and status and social networks.

Different Groups impact the consumer’s behavior. The Groups which the person belongs to, have
a direct impact on his/her purchasing behavior; such group is called membership group. On the
other hand, reference groups are the groups which influence people who do not belong to them.
They are inspired with that group, compare themselves with them and want to be like them. For
example, for a cricket lover, the reference group will be national cricket team. Marketers must find
the ‘reference groups’ within their target markets and try to influence the attitudes of the consumers
through creating pressure via reference groups. For example, taking a cricket star in their
advertisements to target cricket lovers.
A new kind of social interface has been emerged over the last years, which is “online social
networking”. Online social networks are the groups on internet or online communities where
individuals meet, socialize, and exchange opinions on internet using social networking websites
like Facebook, Instagram and Twitter. Marketers are trying to use these recent technological
platforms to have one to one communication with customers and become the part of their lives and
conversations.

Another important group which can influence a consumer’s purchase decision is Family. Family
structures and buying behaviors have been widely researched in marketing. Marketers are
concerned to know the influence of husband, children and wife in family decision making as well
as the overall buying behavior of family.

A person belongs to different groups at one time; for example, family, organization, sports club,
online community. The position of an individual in each group is characterized by both his status
and role. A role is defined as the activities/actions people of that group expect you to perform.
Each role holds a status based on the general approval given to it by society. For example, a person
may be the brand manager in his organization, a father and husband in family, a captain in sports
team and opinion leader in online community.

A consumer’s decision is also affected by personal factors that are his/her personal traits or
characteristics e.g. age, economic situation, occupation, personality, life style and self-concept.
People’s occupation plays a major role in what they buy. For example, business people may buy
suits while a person working in factory will buy rough clothing. Marketers identify different
occupational groups and see if they can target them according to their product. People keep on
changing the goods and services during their lifetime. At young age, they use different products
and will change them as the get aged. Taste of food, clothing, recreation and furniture changes as
the person gets old.

Another factor which plays a major role in consumer’s buying pattern is his economic situation.
People spend on goods and services based on the income they earn. Marketers have to see the
trends in personal income, interest rates and savings and reprise or redesign their products to target
the specific group accordingly, if needed. People also buy goods and services according to their
life style. The lifestyle of the people of same subculture group or same social class might be
different as it is a person’s style of living. Lifestyle encompasses consumers’ major AIO
dimensions which are: activities (hobbies, shopping, work, shopping, social events, sports),
interests (family, fashion, recreation, food), and opinions (about social issues, business,
themselves, products). Marketers have to understand that consumers don not purchase products,
they purchase values and lifestyle.

Personality is defined as unique psychological traits that differentiate an individual or a group

from that of others. It is usually defined as personal characteristics for instance sociability, honesty,
autonomy, self-assurance, aggressiveness, and beauty. Personality of a person has a greater impact
on his/her product choice. Marketing research suggests that brands also have personalities.
Consumers buy the products which suit their personalities or the ones which have the same
personality characteristics as the consumer has.

The buying choices of consumers are further affected by psychological factors which include
attitude, beliefs, learning, perception and motivation.

People have many needs at one time; some needs are biological needs for instance hunger, thirst,
or comfort whilst others are psychological for instance esteem needs, need for recognition, and
love. A need turns into motive when it reaches to a certain level of intensity. When a need is so
intense that it motivates/persuade a person to seek satisfaction, it is called motive. This motivation
to seek water when you are thirsty or food when you are hungry is what marketers use to persuade
consumers to buy their products. There are different theories of motivation; we will discuss here
Abraham Maslow’s theory of motivation called hierarchy of need theory.

Figure 3 shows the five needs in a pyramid, from extremely pressing needs at the bottom side or
base to less pressing needs at the top of the pyramid. The needs include self-actualization needs,
esteems need, social needs, safety needs and physiological needs. Maslow explained that these
needs are sequential. One cannot move to the upper level need unless he/she has satisfied the
previous need in the hierarchy. A person first tries to fulfill the basic needs. When these needs are
satisfied, they will stop motivating the person and he/she will then try to satisfy the next pressing
need.

Figure 3: Maslow’s hierarchy of need theory

When a person is motivated, he/she is ready to take some action. How that person will act, depends
upon his/her perception. Perception is a process by which an individual selects, organizes, and
interprets pieces of information in order to form a meaningful image of the world. It’s a glass
through which we see the world. Different individuals can form different views about the same
object due to three perceptual processes: selective distortion, selective attention, and selective
retention. Consumers are bombarded with thousands of ads or stimuli every day. It is not possible
for them to pay full attention to all. The preference of the consumers to screen out information
which they are exposed and not interested in is called selective attention. Marketers must work
hard on marketing campaigns to capture the attention of target consumers. Even if the consumers
pay attention to a certain stimuli does not mean that the information has been transferred the way
it was intended to. Every person matches the received information into his/her existing mindset.
The tendency of individuals to interpret information in a way which favor their existing beliefs is
called selective distortion. Consumers do not remember everything they pay attention to. Selective
retention means that consumers are expected to remember good things about a product they
support and forget good things about competing products or brands.
When people take action, they do learn. Learning is defined as the change which occurs in a
person’s behavior because of his/her experience. Most of the behavior is learned. For example, if
a person buys Apple computer and his experience is good, he will buy Apple’s products again, and
his response will be reinforced.

Through perception and learning, consumers develop beliefs and attitudes which, in turn, impact
their purchase behavior. A belief is referred to as a descriptive thought which a person holds about
something. Beliefs might be based on opinion, faith, or knowledge. These beliefs create brand
image of products which is the reason marketers are concerned about the beliefs that consumers
make about their products. Attitude is defined as a person’s comparatively constant evaluations,
tendencies, and feelings about an idea or object. Attitude is what makes consumers like or dislike
something. To summarize, social factors, cultural factors, psychological factors social factors, and
personal factors collectively influence the buyer behavior and purchase decision.

The second component which influences buyer’s black box is buyer decision process. Before
discussing buyer decision process, we will see types of buying decision behavior.
Buying behavior of consumers differs for different products. Buying behavior for a toothpaste or
shampoo will certainly be different from a car or mobile. Figure 4 shows different types of buying
behavior based on the degree of differences among brands and the extent of buyer’s involvement.

Figure 4: Types of buyer decision behavior

Complex buying behavior is undertaken by the consumers when they are highly engaged in the
whole purchase process and there are significant perceived differences among brands. Buyers are
highly engaged when products are costly, purchased infrequently and risky. Consumers undertake
dissonance reducing buying behavior when they are highly involved with an expensive, risky and
infrequent purchase but there are few perceived differences among brands. For example, if a person
wants to purchase carpet, he will face few differences in carpet brands. In this type of buying,
consumers may face post purchase dissonance (after-sale dissatisfaction) which marketers can
reduce by after sale support so that consumer feel good about their purchase decision. Habitual
buying behavior occurs where consumers are less involved and there are few significant brand
differences. For example, low cost products like daily grocery items. Buyers undertake variety
seeking buying behavior when there is low involvement but significant perceived differences
among brands. In these cases, consumers go for brand switching. For example, if a consumer
purchases biscuits, he/she would like to try different brand every time.
Now we will see how consumers make buying decisions. Figure 5 shows the five stages of buyer
decision process.

Figure 5: Buyer decision process

The first stage in buying process is need recognition where the buyer identifies the need. This
need can be caused either by internal stimuli (hunger or thirst) or external stimuli (where consumer
thinks of buying a new mobile by watching an advertisement). Second stage is information
search where consumer’s drive is so strong that he/she starts searching for more information about
the product. Information can be gathered from several sources such as personal sources (family,
friends and colleagues), commercial sources (media, advertisement, and sales people), public
sources (mass media, internet search) and experiential sources (examining, handling and using the
product). Marketers need to know about alternative evaluation which is related to how consumers
evaluate different products to choose the final product to purchase. Consumer uses some personal
criteria of evaluating different brands which depends on individual consumer as well as specific
buying situation. After evaluation among the alternatives, consumer chooses one product to
purchase and make the actual purchase decision.

The process does not end here; after buying the product, buyer may be satisfied or dissatisfied with
the product. If the performance of the product is below expectations, consumer will be dissatisfied.
On the other hand, if the performance of the product meets expectations, buyer will be satisfied.
Moreover, if the performance of the product is above expectations, buyer will be delighted.

An important thing to consider here is, in case of new products/innovations, buyer’s decision
process would be different. A new product is a good, idea, or service, that is recognized by some
potential buyers as new. The perceptual process, through which a person goes from first knowing
about an innovative product to final adoption of that product, is called new product adoption
process. A consumer goes through the following five stages while adopting a new
product/innovation.

Awareness: The consumer hears about the new product but have a little knowledge about it.
Interest: The consumer tries to get more information about the new product.
Evaluation: The consumer evaluates the benefits of the new product. Is it of any use to him? Does
this purchase make sense? Will it benefit him?
Trial: It is very hard for consumers to buy a new product without trying. So, the consumer tries
the new product (if allowed) on a small level to improve his or her assessment of its value.
Adoption: The buyer takes decision to fully use the product.
When introducing innovations/new products, marketers have to think on how they can help
consumers pass through these stages to make them try the new product.

When introducing new products in the market, marketers should know how much the product
characteristics influences its rate of adoption. Some innovations are adopted too quickly like
microwave while others take long time to be accepted in market. Following are the characteristics
of products which influence new product’s rate of adoption.
Relative advantage: Consumers will adopt the new product more quickly if they think it is superior
to the existing products. For example, when microwave was introduced, there was no such thing
in market which could heat food in seconds without using stoves.

Compatibility: Compatibility is the extent to which a product matches the experiences and values
of prospective consumers. It is related to the product traits that affect the adoption rate because
consumers will not adopt the product initially if it is not compatible with their mindset.

Complexity: The extent to which a new product is hard to use or to understand is also one of the
product traits that affect the adoption rate. For example, when microwave was first introduced in
the market, it was adopted very fast because of the ease to use it.

Divisibility: Divisibility refers to the extent to which a product may be tried on a limited basis.
Consumer wants to try some expensive product before purchasing it. For example, consumer will
not buy the new car without having to test-drive it first. In case of the products which are too
expensive, the rate of adoption is slow as there is less opportunity to test it before purchase.

Communicability: Even if all other product traits that affect the rate of adoption are satisfactory,
communicability can still slow down the adoption of the product substantially. Communicability
is the extent to which the results of utilizing an innovative product can be seen or described to
others. Because microwaves lent itself to display and description, its consumption had spread faster
among customers.
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GENERALLY ASKED QUESTIONS

Question 1: What is the key difference between exploratory and descriptive research with
examples?

Answer: An exploratory research is the investigation of a problem which is not clearly defined
and answers the 'why' element of a question. While in descriptive research we describe the
characteristics of a phenomenon under study by answering the 'what' element of a question. For
example, a researcher wants to investigate the purchasing pattern of a clothing brand so in order
to answer the question 'what is the purchasing pattern of customers in Lahore'; he conducts
descriptive research. While in order to study the 'why the customers of Lahore purchase a particular
clothing brand?' he conducts exploratory research.